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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (327331)	2/25/2007 2:47:10 PM
From: Road Walker	Read Replies (4) \| Respond to of 1577301

re: FLA and the whole Gulf Coast is having problems. There is a serious problem with the insurance companies. And not just property. In essence insurance is gambling, and thus the industry is very regulated. It performs a social service; spreading risk. If they stop speading risk, then the social service doesn't apply, and they are just fixing the odds. It wouldn't fly in Vegas and it shouldn't fly in earthquake prone California, or tornado prone Kansas of Hurricane prone Florida. Their next step is health insurance. If they know your genes, they know their risk. Bottom line is people that need insurance can't get it and people that probably don't can. What service to society does that provide?

To: tejek who wrote (327331)	2/26/2007 8:28:05 PM
From: TimF	Respond to of 1577301

Its not an issue of being profitable or not. Its an issue of making as much profit as possible. If the risk adjusted rate of return isn't there, there isn't an incentive to be in the business. The resources that go in to the business could make a profit sitting in T-Bills. Obviously writing insurance to hurricane prone areas is riskier. Price caps rarely work out well. Arguably they can be justified when you have a true monopoly (and not just a dominant company, but a legally granted total monopoly), but for the most part that isn't the case here, and even when it is, you have a less than ideal situation. "You can get insurance in almost every part of the country." Now but what about ten years from now? Absent more price caps it should be the same 10 years from now, or 20, or 100.